How IPO Allotment Works and How to Increase Your Chances
IPO allotment, who gets shares and who does not, is one of the most common questions from first-time IPO applicants. The process is computerised, transparent, and SEBI-regulated. Here is exactly how it works and what you can do to maximise your chances.
Why Don’t You Always Get IPO Shares?
When an IPO is oversubscribed, meaning demand exceeds supply, not everyone who applies gets shares. For the retail category (RII), allotment is done via a computerised lucky draw. Unlike the NII (HNI) category where larger bids get proportional allocation, every retail application for 1 lot has exactly the same allotment probability regardless of bid size.
Investor Category Quotas
| Category | Quota | Who Applies | Allotment Method |
|---|---|---|---|
| QIB | 50% of issue | Mutual funds, FIIs, banks, insurance companies | Proportional to bid size |
| NII sHNI | 5% of total issue | HNIs: Rs.2 lakh to Rs.10 lakh applications | Lottery among applicants (since 2022 SEBI change) |
| NII bHNI | 10% of total issue | HNIs: above Rs.10 lakh applications | Lottery among applicants |
| RII Retail | 35% of issue | Individuals up to Rs.2 lakh total | Lottery, 1 lot or 0 lots per applicant |
The Retail Allotment Process Step by Step
- IPO closes, all applications are compiled by the registrar (KFintech or Link Intime)
- Total valid retail applications are counted
- Maximum allottable lots = Total retail shares / Lot size
- If applications <= maximum lots: everyone gets 1 lot (undersubscribed)
- If applications > maximum lots: computerised lottery runs, each application = 1 entry
- Results published, allotment date is typically T+6 from IPO close
5 Ways to Increase Your IPO Allotment Chances
- Apply from multiple demat accounts, one per family member with different PAN. Each application = one lottery entry. 4 family members applying = 4x better odds.
- Always apply at cut-off price, never bid below the top of the price band. Cut-off ensures your application is valid at the final issue price.
- Apply on Day 1 or Day 2, avoid the last day rush when UPI systems get overloaded and applications fail due to technical errors.
- Ensure your bank account has sufficient funds, mandate failures due to insufficient balance are one of the most common rejection reasons.
- Apply via ASBA through your bank’s internet banking as a backup if UPI fails, ASBA is more reliable for large-value applications.
What Happens After Allotment
- Allotment status published on registrar website (KFintech / Link Intime) and BSE
- Shares credited to demat account by T+1 after allotment date
- Unblocked/refunded funds returned to your bank account within 1-2 business days
- Listing on NSE/BSE typically on T+6 from IPO close date
FAQs
Can I apply for more than 1 lot to increase chances?
In the retail category, 1 lot and the maximum (Rs.2 lakh worth) have IDENTICAL allotment probability. Apply for 1 lot unless you have a specific reason to apply for more.
What is a valid application?
An application with correct PAN, valid demat account number, cut-off price selection, and UPI mandate approved within the window.
Can I cancel my IPO application?
Yes, until the IPO closes. After closing, cancellations are not allowed.
What if my UPI app crashes during mandate approval?
Try again immediately. UPI mandates can usually be approved multiple times until the IPO subscription window closes. Also check the BHIM app as an alternative.
How many days after IPO close is listing?
Currently T+6 trading days from IPO closing date for mainboard IPOs. SME IPOs may take slightly longer.
Disclaimer
The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Lemonn (Formerly known as NU Investors Technologies Pvt. Ltd) do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
